ProVal Headers and Footers

A change is being implemented in ProVal 2.28 wherein standard header and footer information will be stored in each user’s PROVALW.INI file. Whereas, this information could not previously be modified outside ProVal, this change allows system administrators to standardize this information in an efficient manner. Standard header and footer information may be modified either by using the following dialog (just as it was before)

or by editing the PROVALW.INI file:

[Header]
1=#TITLE ^ #USER Page #PAGE of #NUMPAGES
2=#TITLE2 ^ Printed: #DATE #TIME

BlankLinesBelow=2

[Footer]
1=Folder: #PATH

2=Project: #PROJECT ^ Version: #VERSION
BlankLinesAbove=1

Additionally, in output styles that allow the use of custom print settings, such as Valuation Output, Valuation Set Output, etc., users will have the option to either use standard headers and footers or custom ones defined in the output style. Therefore, only within these menu items, the Header and Footer dialogs will now look like this:

Note that previously, output styles always used custom header and footers. When you update client files to version 2.28, existing output styles will be converted to use the standard header and footer. We favor this since that will give printouts a consistent look across a firm, even if the standard header and footer changes in the future. If you would prefer that your existing output styles continue using custom headers and footers, please let us know by Monday, June 2 by writing to us at support@winklevoss.com. This will only be an issue if you use output styles to produce files (e.g., spreadsheets) which depend on fixed row locations AND you’ve modified (or plan to modify) the header from ProVal’s default.

Setting interest assumptions for U.S. valuations in 2008 and beyond

Purpose and scope
This document explores possible approaches to setting interest assumptions, including lump sum conversion rates, for U.S. valuations in 2008 and beyond. Techniques for applying these approaches in ProVal are discussed, and where reasonable, possible future ProVal enhancements are proposed. This material is for discussion purposes only.

We’ll focus exclusively on interest rates. For a discussion of mortality assumptions, see the ProVal R&D posting on 12/14/2007.

Background

Starting in 2008, PPA prescribes new interest rates for funding liabilities under Internal Revenue Code (IRC) §430 and conversion rates to determine minimum lump sums under IRC §417(e). Funding liabilities are to be determined using one of three interest rate types: a corporate bond curve, segment rates, or transitional segment rates (for 2008 and 2009 only). Minimum lump sums are to be computed using segment rates (that differ from the segment rates for funding liabilities). Interestingly, in a funding valuation, the lump sum conversion rate is generally set equal to the funding interest rate, not the current lump sum conversion rate.

As of January 2008, these rates look like this:

Source: IRS Notice 2008-17

In an accounting valuation, lump sum conversion rates also affect the determination of cash flows, and therefore the determination of the discount rate for accounting liabilities under FAS 87/158.

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Comments and feedback

In order for this process to be successful, we need to hear from you. Please let us know which approach(es) your firm plans to take in response to each of the questions posed above. If we haven’t identified an approach you plan to use, tell us about it. Be sure to let us know what you think of the proposed ProVal enhancements.

We encourage you to post your comments and feedback here. If you prefer, you can send comments and feedback to support@winklevoss.com.

Disclaimer

This document may contain inaccurate, incorrect, or incomplete information. Its purpose is to describe software functionality and not to provide tax or legal guidance. Please consult the relevant law, code, and regulations for such guidance.

Setting mortality assumptions for U.S. valuations in 2008 and beyond

Purpose and scope
This document explores possible approaches to setting mortality assumptions for U.S. valuations in 2008 and beyond. The goal is to determine which approaches will be adopted in practice so that enhancements can be planned for future versions of ProVal (i.e., version 2.28 and beyond). This material is for discussion purposes only.

We’ll focus exclusively on mortality; interest rates are not discussed here.

Summary
Starting in 2008, PPA prescribes new mortality tables to determine funding liabilities under IRC §430 and lump sums under IRC §417(e). Funding liabilities are to be determined under one of three tables (two of which are static tables for the 2008 valuation year). Lump sums are to be determined using a static table for 2008. Static tables include a static projection of future mortality improvement that approximates a generational table. For each subsequent year (i.e., 2009, 2010, etc.), the IRS expects to update the static tables with one more year of mortality improvement.

In the absence of specific guidance, there are many approaches an actuary might take in setting mortality assumptions for valuations and forecasts, especially when static tables are used. The actuary might assume that static tables remain unchanged or that they will be updated in subsequent years. These updates might be reflected at each decrement year or each valuation year in a forecast. This document explores the possible approaches, and, where reasonable, proposes future ProVal enhancements.

Download full document ...

Comments and feedback
In order for this process to be successful, we need to hear from you. Please let us know which approach(es) your firm plans to take in response to each of the questions posed above. If we haven’t identified an approach you plan to use, tell us about it. Be sure to let us know what you think of the proposed ProVal enhancements for version 2.28.

We encourage you to post your comments and feedback here. If you prefer, you can send comments and feedback to support@winklevoss.com.

Disclaimer
This document may contain inaccurate, incorrect, or incomplete information. Its purpose is to describe software functionality and not to provide tax or legal guidance. Please consult the relevant law, code, and regulations for such guidance.